Shareholders might have noticed that Ingevity Corporation (NYSE:NGVT) filed its quarterly result this time last week. The early response was not positive, with shares down 9.9% to US$41.20 in the past week. Revenues fell 2.8% short of expectations, at US$391m. Earnings correspondingly dipped, with Ingevity reporting a statutory loss of US$7.81 per share, whereas the analysts had previously modelled a profit in this period. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the current consensus, from the five analysts covering Ingevity, is for revenues of US$1.44b in 2024. This implies a perceptible 7.3% reduction in Ingevity's revenue over the past 12 months. Ingevity is also expected to turn profitable, with statutory earnings of US$1.34 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.49b and earnings per share (EPS) of US$1.34 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

It will come as no surprise then, that the consensus price target fell 9.3% to US$48.60following these changes. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Ingevity, with the most bullish analyst valuing it at US$58.00 and the most bearish at US$40.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 14% by the end of 2024. This indicates a significant reduction from annual growth of 7.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ingevity is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Yet - earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Ingevity going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Ingevity that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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